Saudi GDP growth speeds up in Q3, non-oil sector still slow

Riyadh earlier released a state budget for 2019 that would increase spending by 7 percent from this year’s actual level. (AFP)
Updated 31 December 2018
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Saudi GDP growth speeds up in Q3, non-oil sector still slow

  • The Saudi economy has been hit hard in recent years by low oil prices and state austerity measures to curb a huge budget deficit
  • Growth in the non-oil sector slowed to 2.1 percent from 2.4 percent

DUBAI: Saudi Arabia’s economy grew in the third quarter at its fastest rate since early 2016, boosted by expansion of the oil sector while non-oil growth stayed sluggish, statistics agency data showed on Monday.
Gross domestic product grew 2.5 percent from a year earlier. That was an acceleration from the second quarter, when GDP rose 1.6 percent, and the fastest since the first quarter of 2016, when the same rate was registered.
The Saudi economy has been hit hard in recent years by low oil prices and state austerity measures to curb a huge budget deficit. In 2017, it shrank for the first time since the global financial crisis nearly a decade earlier.
Monday’s data suggested the recovery from that slump was still tentative. GDP growth picked up largely because of higher oil output. The oil sector expanded 3.7 percent from a year ago in the third quarter, after 1.3 percent in the second.
Growth in the non-oil sector, key for job creation and Saudi Arabia’s effort to diversify its economy, slowed to 2.1 percent from 2.4 percent.
Saudi officials have predicted a gradual acceleration of the non-oil economy next year. Bank lending to the private sector rose 2.3 percent from a year earlier in November, its fastest growth since 2016.
This month Riyadh released a state budget for 2019 that would increase spending by 7 percent from this year’s actual level. Investment spending and bonuses for state employees in the budget could revive the private sector.
But senior officials have refused to rule out further austerity steps next year, including a planned hike in fees for hiring foreign workers and a possible increase in domestic fuel prices. Such steps have weighed heavily on private sector firms.
Meanwhile, global producers agreed early this month to cut oil production in an attempt to prop up prices. Saudi Arabia said it would cut output in January by almost 5 percent from December, which would shrink the oil sector and dampen headline GDP growth.


Instagram moves into e-commerce with shopping button

Updated 20 March 2019
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Instagram moves into e-commerce with shopping button

  • A new “checkout” button for instant purchasing launched in a beta version of the app in the US with a limited number of businesses
  • Facebook makes the bulk of its money from digital advertising but has dabbled with e-commerce in the past

SAN FRANCISCO: Facebook-owned Instagram on Tuesday made a move into potentially lucrative e-commerce by adding an option to buy products shown off in posts by selected brands.
A new “checkout” button for instant purchasing launched in a beta version of the app in the US with a limited number of businesses, according to the popular image-centric messaging service.
“We’re introducing Checkout on Instagram,” the Silicon Valley based division of Facebook said in an online post.
“When you find a product you love, you can now buy it without leaving the app.”
Tapping the checkout button will allow shoppers to select options such as size or color and then pay for items without leaving the Instagram app.
Previously, people inspired to buy products featured in Instagram posts had to follow links to outside online shopping sites.
Information entered for an initial purchase will be stored for future use, according to Instagram.
It remained to be seen how people would feel trusting information such as credit card details to a service owned by Facebook, which has been hit with waves of criticism for its handling of personal data.
Brands taking part in the checkout feature included Adidas, Burberry, Dior, H&M, Nike, Oscar de la Renta, Prada, and glasses retailer Warby Parker.
Facebook makes the bulk of its money from digital advertising but has dabbled with e-commerce in the past. It has pitched its Messenger service as a communication platform for shops or brands to connect with customers.